FLUOROCHEM Q1 FY27 earnings call.

Guidance to track

• Management maintained the annual growth target for fluoropolymers driven by volume additions from new high-value grades and debottlenecking activities. Most approvals for new products expected in place by FY27 year-end.
• Existing R32 capacity at 10,000 tons is fully utilized. Expansion expected to be commissioned in Q2 FY27 targeting full utilization in calendar year 2027 across domestic and export markets.
• R134A capacity expected to be commissioned by end of FY27 (targeting earlier). Brownfield expansion at existing site with TCO to be imported. Will complete refrigerant bouquet alongside R32, R22, and R125.
• Management confirmed being on track to achieve three-digit revenue in Q4 FY27 with significant ramp-up expected in FY28. LiPF6 in growth phase, PVDF close to qualification completion, LFP cathode materials toward end of FY27.

Risks flagged

• The 216 million dollar Oman battery materials project has been put on hold and relocated to India due to geopolitical delays. The previously approved 1,200 crore funding from a sovereign fund will not be available for the India project, requiring alternative funding arrangements.
• Analyst asked about consumption quota allocation for R32 sales to new players. Management deflected, stating they cannot comment and will follow up separately, indicating uncertainty on how quota formulas apply to new market participants.
• While management stated they do not compete directly with Chinese players in high-value segments, price increases in commodity fluoropolymers have been small and will reflect in subsequent quarters. Margins in commodity grades remain under pressure despite formula-based pricing protections.
• Battery materials qualification and stabilization takes approximately 1.5 years. Full potential from current capex investments will materialize from FY28 onwards. Any further delays in customer qualifications could impact revenue ramp-up timelines.

Key quotes

• We have been also making this commentary from last few quarters that we are trying to move up the value added chain into the fluoropolymer products and hence we do not have much of a competition with Chinese people.
• 3M is now an event of the past now. So in the last two years we have more or less taken the full impact of whatever 3M exit happened... Now coming toAGC that announcement has just come yet. So we have started getting some queries and inquiries from the customers who were using their material.
• We expect to grow further from here on polymers has done well and expected to grow as we had said earlier 17 to 20% annually going forward. Fluorochemical segment has emerged as a very strong contributor to our financial and is expected to contribute meaningfully to our profitability going forward.